Silvergate Bank Under Fire: U.S. Senators Demand Details on Ties to FTX and Alameda

• U.S. lawmakers are seeking details from Silvergate Bank regarding its ties to FTX and Alameda.
• Silvergate received a similar letter last year but couldn’t provide a satisfactory response.
• Senators Elizabeth Warren, John Kennedy, and Roger Marshall sent a strongly worded letter to the bank’s parent firm, demanding clarity on its involvement with Sam Bankman-Fried’s failed crypto empire.

U.S Lawmakers Investigating Silvergate Bank

A group of Bipartisan U.S Senators have brought Silvergate Bank under the spotlight for its relationship with bankrupt crypto exchange FTX and sister firm Alameda Research. The senators Elizabeth Warren, John Kennedy, and Roger Marshall have sent a strongly worded letter to the bank’s parent firm, Silvergate Capital Corporation, requesting information about their involvement with Sam Bankman-Fried’s failed crypto empire.

Silvergate’s Initial Response was Unsatisfactory

Silvergate had previously received an inquiry from the senators in December 2022 but their response was deemed unsatisfactory by the lawmakers due to it being „confidential supervisory information“. They requested specific details about their risk management measures, due diligence process and accountability following the significant lapses related to FTX and Alameda Research activities.

Questions Asked by Senators

The senators asked questions pertaining to Silvergate’s risk management practices such as providing specifics of policies/procedures in place, what due diligence revealed etc., as well as if they ever identified any wrongdoing by FTX or other related entities and how they acted upon it? Further they questioned Chief Risk Officer Tyler Pearson on why he remained part of the risk management team despite failures with FTX & Alameda? Lastly they asked if executives were held accountable for these failures or not?

Compliance With Federal Reserve

The lawmakers also inquired if Silvergate is compliant with Federal Reserve regulations along with details of exams conducted by Fed so far and problems noticed during due diligence process? Furthermore they asked about independent audits conducted and issues identified during this audit that weren’t covered before?

Time Period for Answers

The senators stated that they expected answers to all inquiries by 12 February 2023